Categorizing apps

On m iPhone4 the apps would not bundle up into categories like, books, utilities, business etc. Despite all my efforts i only see my apps categorized in ITunes but not my iPhone. Cn anyone give me a tip? Thnks

When you try to create folders (what I assume you mean by categories) on your iPhone, what happens? So, when you hold down your finger on an app and drag it over another, are you not given the option to create a folder?